House Finance Committee proposes $9.1B operating budget

JUNEAU — The House Finance Committee on March 3 proposed a $9.1 billion state operating budget, about $1.3 billion less than the authorized level of spending at the start of the current fiscal year.

The proposal also is more than $3 billion less than what Gov. Sean Parnell put forth. Parnell’s proposal included shifting $3 billion from savings to help pay down the state’s unfunded pension liability, which the committee didn’t include in its plan. Lawmakers have not yet decided how to address that issue.

Subcommittees were asked to find cuts without harming critical services of departments amid projections of less revenue and the expectation that the state will have to dip into savings to get by until the revenue outlook improves.

The bill unveiled by the committee March 3 cuts about $41 million in unrestricted general funds from what Parnell proposed. That category of funding refers to money that isn’t restricted in its use by the law, constitution or something else.

Parnell’s budget director, Karen Rehfeld, said she needed to get reaction from the various departments to know to what degree some of the proposed changes were “manageable.”

Lawmakers rejected $3.1 million for the proposed addition of 15 new village public safety officers, or VPSOs. In recent years, Parnell has proposed adding 15 new officers a year as a way to help improve public safety in parts of rural Alaska; lawmakers last session approved funding for five new officers.

The public safety subcommittee, in its report, said while it would like to see as many VPSOs working as possible, the Department of Public Safety must figure out how to fill and retain the dozens of currently open positions that exist before the subcommittee considers adding more. The turnover rate for the demanding job has long been a problem. The subcommittee also cut a proposed new trooper for VPSO oversight since that position was in conjunction with the 15 officer posts that were denied.

Lawmakers also rejected $627,000 in proposed merit pay increases for staff with the Alaska Gasline Development Corp., which has been working to advance an in-state natural gas pipeline project. The commerce subcommittee, in its report, said while valuable staff are key to AGDC’s mission, it was not reasonable to expect to fund such pay increases for a relatively new organization.

The House Finance budget bill cuts $1 million for gift shops aboard state ferries. Transportation Department spokesman Jeremy Woodrow said by email that if the budget cut stands, the Alaska Marine Highway System will begin transitioning out of the gift shops currently on five vessels this summer. Woodrow said the gift shops do not make money and cost the ferry system about $1 million a year to operate. Personal and first-aid items would still be sold at ferry cafeterias, he said.

Other cuts include funding for a prescription drug database that Rep. Mark Neuman said was originally aimed at addressing people who prescription-shop but isn’t updated in real-time, $1.4 million for an effort approved by lawmakers last year to allow the state to move toward taking over the lead role from the Army Corps of Engineers in the dredge-and-fill permitting program, and $2.4 million for the Alaska Youth First Program, a grant program aimed at helping young people learn about and prepare for careers. Parnell said Monday that he would work to restore the Alaska Youth First funding.

House Finance planned to take public testimony on its version of the budget March 4 and 5. Once the bill passes the House, it still must be taken up by the Senate.